Research and Evaluation: A mature market

While most sectors in the UK PR industry have suffered the results of a market downturn over the past few years, the media evaluation sector that serves the PR industry has been growing steadily. The Top 10 companies in the first ever PRWeek/AMEC league table of media research and evaluation companies accounted for more than £14m in income between July 2001 and June 2002.

Mark Westaby, the Association of Media Evaluation Companies (AMEC) chairman and Metrica joint MD, says: 'I would say that the media evaluation industry has been significantly less hit (by market downturn) than the PR industry in general. It's stood up very well.'

The growth in investment in specialist evaluation services is largely due to a need to justify investment in PR at a time when budgets are in question, according to managers of evaluation firms. This has led to some bullish expectations in the industry.

'We've had two good years in a row and it's looking quite good this year as well,' says Tim Burns, managing director at Test Research, which ranked fifth in the table.

Growth has been fairly evenly spread across the whole sector. Even at the lower end of the table, £500,000 Carma International (ranked tenth) is reporting impressive growth.

'This year, we would expect 25 to 30 per cent growth,' reports Carma International managing director Tom Vesey.

This all looks encouraging for the sector, but despite the promising market conditions there are signs that the relatively young industry could soon hit a more challenging phase. Although growth this year is expected to be healthy, some flattening is expected.

'Increasingly, what we are seeing in AMEC is that companies are picking up business from competitors which is a sign of the market maturing,' says Westaby.

'As a market starts to mature, there is inevitably more competition, and this is a healthy thing. Growth is, as a result, expected to be flat for most of the industry, which is exactly what you'd expect from a sector that has, on average, been growing by about 20-30 per cent a year for several years,' he adds.

Sandra Macleod, chief executive of the UK's largest research and evaluation company, Echo Research, observes two different markets emerging as the industry matures. At the low end, those with tight budgets are looking for the basics, such as simple data like word counts. 'Because of the pressures on budgets, people are saying "just give me something quick and cheerful and inexpensive",' she says. At the other end of the scale, clients who are drowning in data are looking for outside help to work out what it all means.

One of the trends the industry is harnessing is the cost-effectiveness of technology. New technologies are being used to provide data to clients faster, whether by email or through bespoke web portals accessible anywhere, allowing clients to drill down through raw data themselves.

'It's not just a case of sending stuff to people over email. It's allowing them to come in and slice what they want,' says Clements.

One of those attempting to cash in on the need for fast, cheaper evaluation is Thomson Intermedia, which has just developed News Metrics, a daily online service which includes a tracking of the type of coverage companies receive from individual journalists writing about them, and then grading how positive or negative that coverage has been. With prices starting at £10,000, business development director Jon Shepherd says he expects strong demand, partly because it is instantly actionable, letting PR departments know which journalists they need to speak to.

This empowering of the client through technology, allowing them to access data directly, is yielding positive interest in evaluation products, but tougher times for clients do seem to have slowed down the pace in the development of such tools.

'A couple of years ago there were more sophisticated research and evaluation tools coming in,' says Westaby. 'It's fair to say there's less call for that at the moment.'

At the high end of the market, the drive for interpretation has seen media evaluation moving away from the press cuttings model, from which much of the industry was born, into territories once occupied by market research. In short, such clients want to know less about how many cuttings they have had and more about what effect this has had on changing opinion and behaviour among key audiences.

'There are a lot of clients that have moved on from just wanting to know what they got in the media to wanting to know what effect that's had on people,' says Burns. He puts part of this drive down to changes in the whole marketing communications environment: 'I think the whole impact is shifting towards the idea of integrated campaigns, where they are looking not just at the effect of PR.'

Millward Brown Precis chief executive Fergus Hampton agrees, observing that as marketers look outside traditional media channels such as TV and take a media-neutral approach to marketing, they are demanding the same sort of accountability from PR that they have traditionally enjoyed from other marketing disciplines like advertising and direct mail.

'If you are dealing with marketing people, they want to understand how media coverage from PR fits into their overall marketing activity. Have they got their messages in front of their target audiences?', says Hampton, whose firm ranked second in the table.

Despite such developments, the most discredited PR measure of all, Advertising Value Equivalents (AVEs), has made something of a comeback in the past two years. This is seen as a challenge. Treated with derision for years, the return of AVEs is seen by some as a sign that the evaluation industry has failed to convince the broad mass of clients that existing methodologies actually prove the value of PR.

'I think the issue regarding AVEs is that they address a real need - clarity, ease of use, simple to communicate. The challenge for us is to provide a better quality of measure which still fulfils that need,' says Romeike Media Intelligence head of value added services Edward Bird.

But in the absence of such a methodology, the more relaxed line on the subject has been that at least the use of AVEs is evidence that some realise the importance of evaluation.

TOP 10 MEDIA EVALUATION COMPANIES

Rank Agency Turnover 02 % research % evaluation

1 Echo Research 4,065,895 6 94

2 Millward Brown Precis 2,300,493 - 100

3 Report International 1,516,580 - 100

4 Metrica 1,511,337 17 83

5 Test Research 1,419,934 79 21

6 Mediatrack 857,593 - 100

7 Delahaye Medialink* 764,323 - 100

8 Presswatch Analysis 627,596 55 45

9 Impacon 500,000 15 85

10 Carma International 500,000 - 100

*Due to legal and reporting procedures under its Nasdaq listing,

Delahaye Medialink cannot extract audited figures for the UK market

only. This figure, while representing UK income only, is therefore not

audited

- The PRWeek/AMEC League Table was compiled by PRWeek in consultation with the Association of Media Evaluation Companies (AMEC). Company data was submitted by each firm individually with all financial figures and data subjected to audit

- Among the UK's leading research and evaluation companies, three firms declined to enter the league table. They were: Impact Evaluation Services, Mantra International and Romeike Media Intelligence

- Data submitted covers the period July 2001-June 2002.

Financial data includes turnover from research, media evaluation and media analysis work carried out and invoiced in the UK only.

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